WILL PINKBERRY BECOME THE NEXT STARBUCKS?
June 14, 2007 by Sean Kelly
Filed under Business
(FranchisePick.Com) Paris Hilton… Jerry Seinfeld… Reese Witherspoon… Salma Hayek… Linsdsay Lohan… Leonardo Di Caprio… Even Andy Dick.
They’re all fans of the trendy, often controversial, and always newsworthy frozen no-gurt sensation called Pinkberry.
Pinkberry addicts call it “Crackberry.” The L.A. Times called it “The taste that launched 1,000 parking tickets.” FORTUNE magazine declares Pinkberry “could become the next hot franchise.” Even Starbucks founder Howard Schultz has taken notice of Pinkberry, and met with the founders.
Will Pinkberry and $10 Green Tea Frozen Yogurt dethrone Starbucks as the King of overpriced treats that let us peasants feel like we are celebrities? (If you answered YES, vote for Pinkberry at Top New Franchises.)
One obvious difference is that Starbucks doesn’t franchise (at least to individuals). Pinkberry, however, does offer franchises. Hmmm…. $10 Frozen Yogurts might not seem like too bad an idea when you’re on the other side of the counter…
The FORTUNE Magazine article (below) spells out a lot of the details.
It came from Los Angeles By Matthew Boyle, Fortune writer
Pinkberry’s tart-yet-sweet frozen yogurt has attracted investors, and inspired competitors, says Fortune’s Matthew Boyle. Is it the next hot franchise?
(FORTUNE Magazine) — Launched in Los Angeles two years ago by a failed restaurateur and a former nightclub bouncer, Pinkberry could become the next hot franchise. This purveyor of tart-yet-sweet swirled yogurt is dubbed “Crackberry” by its fans (no, it’s not made by Research in Motion). Devotees include celebrities Salma Hayek, Jerry Seinfeld, and Paris Hilton. It has also drawn the interest of Starbucks (Charts, Fortune 500) founder Howard Schultz, who, along with representatives from his venture capital firm Maveron, reportedly met with Pinkberry’s founders last November. (Maveron declined to comment.)
“I’ve been practicing franchise law for 18 years, and this is one of a very few [concepts] that I have ever seen” on such a fast track, says Lori Lofstrom, Pinkberry’s franchise lawyer.
Why all the fuss? Pinkberry offers just two yogurt flavors, plain and green tea, sprinkled with the customer’s choice of fresh berries, granola, even Fruity Pebbles cereal. (Some toppings are not officially on the menu, adding to the cult allure.) It’s pricey stuff: While the average purchase is $5.50, a large green tea with three toppings costs nearly ten bucks.
Pinkberry won’t discuss sales, but with upwards of 1,500 customers per location per day, one store could easily bring in $250,000 a month. (A typical unit for TCBY, the granddaddy of yogurt chains, does about $200,000, according to restaurant consultancy Technomic.) There are 21 Pinkberry locations in L.A. and New York, with plans for 50 by year-end. Co-founders Shelly Hwang, 33, and Young Lee, 43, say they turned a profit on their first store four months after opening it.
The founders also say they have received 3,000 requests from aspiring franchisees, who seek to pay a $40,000 upfront franchise fee for the rights to sell the treat – then kick in 7% of monthly sales (a 5% royalty fee, recently upped from 3%, plus 2% for marketing)….
IS PINKBERRY A TOP NEW FRANCHISE?
IF YOU’RE A PINKBERRY FAN LEAVE A COMMENT AT TOPNEWFRANCHISES.COM.
See Who’s Winning:
Yes! I said this exact same thing, and now I know it’s true. I live in Brentwood, and the SECOND Pinkberry is about to open (mind you the first one isn’t out of the construction phase yet). We have two starbucks, and soon, each with have a Pinkberry less than a block away. UNbelievable.
I’m not sure if it is a fad or what. I read on another website that the franchise opportunities are closed for 2007. What a bummer!
Remember, alot of critics said about Starbucks when Schultz came up with the idea. They wondered, “Who would pay $4 for a cup of Joe when they can just make it at home or go to McDonalds?” How wrong they were. LOL.
But, on the other hand, the critics of Pinkberry could be right.
Only time will tell.
This is a dog. And this dog won’t hunt. I have spoken to these folks and they have no idea what they are doing when it comes to franchising. They think hype will carry the concept.
Their is no barrier to entry and only an idiot would buy this franchise.
…only an idiot would buy this franchise.
CrazyZOR:
Well, they’ve got a huge potential market then, as evidenced by the number of folks looking into cereal store franchises. At least PinkBerry has a proprietary product… even if it is faux-gurt. Click on the right sidebar link for Cereality and you’ll have a new appreciation for Pinkberry.
Or not…
In order to make Pinkberry a better franchise opportunity we have to compare it to something even less desirable like Cereality?
Two dogs don’t make a cat!
CrazyZOR
This is your second dog reference in a row. You’re not the Doody Calls ‘zor are you? Or Dogtopia?
Skepticism about Pinkberry seems more than unwarranted. It’s almost sacriligious. I mean, Paris Hilton goes there. Paris Hilton!
Give them credit for knowing their audience. the same people who adore Paris are the same ones who will fork over 6 bucks for some frozen yogurt that’s not really yogurt.
Frozen treat business at the retail level is dead. All one has to do is be familiar with what is happening with the “mix-in” segment Coldstone, Marble Slab and Maggie Moo’s and what did happen with TCBY, ICBY, and Yogen Fruz. These concepts do not have legs unless you have a highly captive audience environment e.g., airport, theme park or tourist trap location.
Pinberry is a fad, it is not unique, there are few barriers to entry and competitors are coming. Once the shine wears off the franchisees will not be able to pay their rent.
I don’t even think they’re actively offering franchises. Maybe Cold Stone will buy them since they seem to be acquiring trendy, air-filled brands.
CrazyZor: have you seen any franchise concepts lately that are worth looking into?
anyone who states that frozen desserts are “dead at the retail level” apparently don’t own any units. I own multiple Golden Spoon frozen yogurt stores in SoCal, and there are lines out the door all day long. We’ve been around for 25 years (yes, since 1981) and have the highest AUV in the entire frozen dessert industry..
Pinkberry stores are indeed doing well too, but I seriously doubt they will experience any longterm success with what is essentially a powdered milk product, Also, kids don’t like the sour taste and if you want a large yogurt with lots of fruit, be prepared to spend around $8 bucks..
the ice cream franchises are indeed suffering (marble slab, coldstone, baskin robbins) because frozen yogurt is taking much of their market share.
Pinkberry is not going to be franchising anytime soon I found this great new concept that started in Florida and is expanding throughout the US. Its called Yogurbella and you can check it out at http://www.yogurbella.com I have tried both and to be honest I enjoy the Yogurbella product a little more… and the stores are stunning too…
Just wanted to share that with you all
Best of Luck,
Andrea
I was visiting California last month and was looking forward to trying Pinkberry. I-yiyi. Really too tart. I tasted it all the way home to Colorado. Too bad I didn’t have time to make a stop at Golden Spoon Frozen Yogurt to enjoy a real treat on my way to the airport. Now that’s really good frozen yogurt.